The firm reported that they have downgraded CLF from “Neutral” to a “Sell,” and lowered their price target from $33 to $25. This price target suggests a 33% decline from the stock’s current price of $33.39.

An analyst from the firm noted, “we downgrade Cliffs to Sell with 29% downside to our new 6-month target price of $25. The announcement to delay its Bloom Lake expansion and curtail some US operations underscores that in a relatively weak iron ore market, high cost producers like Cliffs will be at greater disadvantage. Additionally, we anticipate lower production volume in Canada will translate into higher costs. While we expect a price rebound in 2013, we see prices falling thereafter, placing its expansion plans and dividends at risk. Longer term, new iron ore capacity is being added in North America, which has historically been a stable region for Cliffs.”

Cliffs Natural Resources shares were down $1.90, or -5.38% during premarket trading Tuesday. The stock is down 43.4% YTD.

The Bottom Line Shares of Cliffs Natural Resources (CLF) have a 7.08% dividend yield, based on last night’s closing stock price of $35.29. The stock has technical support in the $29-$31 price area. If the shares can firm up, we see overhead resistance around the $39-$41 price levels.

Cliffs Natural Resources Inc(CLF) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.